When the story first broke on Friday, I was working through my thoughts as to why (if true) this was a bad move on Verizon's part. The cynic in me also thought it could have been investor manipulation of Palm's stock to get a very short term arbitrage or short selling opportunity. From the CNet article:
McCourt also said that he expects the Pre to hit Verizon's network in February. He suspects that the rumor had more to do with investors wanting to influence the company's stock price than any actual change at Verizon. He notes that just before Palm finalized its new funding this week, rumors were circulating that Nokia was looking to buy Palm. The news of the funding deal lifted the company's stock price. And when the subsequent rumor about Verizon not carrying the Pre surfaced, the stock dipped.
Don't you just love Wall Street?
So let me share with you some thoughts as to why I don't believe the rumor. If you believe that Verizon was going to snub the Pre, most likely because of its App Catalog's potential threat to VCast, then you would almost be sure that Verizon would not support any device from Apple given its dominant position with its App Store. That would also mean that Verizon wouldn't want to support any device that had its own application marketplace. So no more Windows Mobile devices, no Android devices, no Nokia. Verizon would certainly keep BlackBerry given the huge installed based on professionals, but that would be an interesting set of negotiations....to say the least.
The point is, Apple has once again changed the game for carriers. The App Store/Catalog/Marketplace/World/Whatever you want to call it is now a great way for consumers to derive new value from their mobile devices. This will drive further adoption of data plans, which you would think carriers would welcome (unless your AT&T these days). My point is, I don't think there's much the carriers can do at this point with regards to application stores. They may very well be cut out of this increasingly lucrative segment of the market. They may in fact be marginalized even more than before.
I think that's OK. I've said this before and I'll say it again. The carriers should stop fighting to be more than a dumb pipe. The cable service providers recognized that a while back, and they are doing well. The wireless carriers should instead find ways to be smarter at being a dumb pipe. As opposed to having exclusive deals on devices, they should try to have exclusive deals on content like how Sprint does NASCAR (not that I have ever watched NASCAR). They should also have tiered pricing for data plans....not on amount of data like they do today, but the speed at which you are connected. If you have slower bandwidth, by definition, you'll use less traffic - that's a win win for the carriers.
So stop fighting the App Stores. Worry less about exclusive deals with handset manufacturers and focus instead on delivering choice and value to your customers - regardless of whether they are consumer or corporate users. And Verizon Wireless, listen to your own words (as per the image at the top of this entry)
Happy Sunday everyone - Go Pats!
